1. Field of the Invention
The present invention relates to an improved data processing system and, in particular, to a method and system for automated electrical business practice. Still more particularly, the present invention provides a method and system for facilitating an electronic commerce transaction for physical goods using an online auction service.
2. Description of Related Art
The amount of digital commerce has increased enormously with the growth of the Internet. With the rapid expansion of electronic commerce, the incidence of fraud for online commerce transactions has started to rise for both auction transactions and traditional sales transactions. Fraud can be present during an online transaction whether or not the transaction is between private individuals, commercial entities, or both, and whether or not the transaction occurs through a public click-and-order Web site, an online auction Web site, or some other type of electronic exchange.
An electronic transaction for physical goods between two physically distant parties clearly increases the potential for fraud by removing the immediate physical inspection and transport of goods that occurs during traditional sales transactions. Assuming that a buyer has received some description of the goods that someone has offered for sale, a buyer that participates in an online transaction is much more likely to be struck by the old practice of “bait and switch”. In some cases, the seller might not ship the goods that the buyer expected to receive or, possibly, does not ship any goods at all. In less serious cases, the buyer may receive the correct goods but not in the condition that was expected because the appearance of the received goods simply does not match an appearance of the goods within a previously received digital image. In any case, the buyer generally has very limited ability to correct the fraud.
An electronic transaction for physical goods between two physically distant parties is inherently difficult as the buyer and the seller must exchange information concerning the goods without an immediate physical inspection of the goods. With the growth of the Internet, the exchange of information has increasingly occurred on the World Wide Web rather than through mail catalogs, brochures, letters, etc. Various electronic services have become available to facilitate sales by allowing a buyer and a seller to visual inspect digital images of the goods. For example, one corporation provides server software that allows a buyer to visually inspect a product by easily and quickly magnifying detailed digital images of a product without requiring massive amounts of digital data to be sent to the buyer. Another corporation provides client-server software that allows a buyer to visually inspect a product by browsing so-called 360-degree images.
Although a seller also enters into an online transaction with some risk, most of the risk lies with the buyer. Digital images sent by a seller to a buyer through e-mail or provided through an online auction service, or even photographs sent by regular mail, may induce the buyer to enter into a purchase transaction. A buyer of the goods relies on the description of the goods that is provided by the seller. While digital image software enhances the exchange of information, images of goods are not necessarily representative of the physical goods that are shipped by the seller, and it can be quite difficult for the buyer to verify that the product description accurately reflects the appearance of the goods that are in the possession of the seller.
In order to protect two physically distant parties that are participating in an electronic transaction for physical goods and to facilitate the transaction, various types of electronic services have been developed. One type of electronic service is an electronic escrow service, which operates in a manner similar to traditional escrow services in which money or property is placed in the custody of a third party until a specified condition has been fulfilled. For example, an electronic escrow service holds electronic funds, such as credit card transactions, electronic cash payments, etc., until the transaction parties are satisfied with the physical exchange of goods associated with the electronic financial transaction. However, electronic escrow services do not eliminate all potential types of fraudulent behavior. For example, a buyer may receive the goods that are similar to what was promised to be delivered, and while the buyer may return the goods and notify the escrow service, the buyer may still lose a percentage of the purchase price as an escrow fee.
Other types of electronic services are more indirect. For example, one electronic service allows buyers to provide feedback on sellers by rating the sellers, and the buyers can generally assume that if a seller is highly rated, then the seller is more trustworthy or reliable. It would be expected that buyers would be more motivated to enter into online transactions with sellers with higher ratings.
As another example of a service that is partially delivered in an electronic manner, a buyer may receive from the electronic service a certified appraisal for an expensive item that has been examined by an accredited appraiser. Receipt of a certified appraisal should provide the buyer with some confidence that the seller at least has possession of goods that match a description that has been received buy the buyer. While each of these methods provides some assurance to the buyer that the goods that are purchased in an online transaction are more likely to be what is expected by the buyer, especially an expectation that has been based on a description of the goods that has been received from the seller, a buyer may still not receive goods that match the description of the goods that is provided by the seller.
Therefore, it would be advantageous to provide a method and system for minimizing disputes between two physically distant parties that are participating in an electronic transaction for physical goods. It would be particularly advantageous to provide a method and system that is economically efficient for both the buyer and the seller in the transaction.